ECONOMICS OF CLIMATE CHANGE ADAPTATION – A CASE OF KHULNA CITY WATER SECTOR PROJECTS

1. ECONOMICS OF CLIMATE CHANGE ADAPTATION – A CASE OF KHULNA CITY WATER SECTOR PROJECTS Professor A.K. Enamul Haque PhD Department of Economics United International University Dhaka, Bangladesh The views expressed are those of the presenter and should not be attributed to either UNDP or USAID. Furthermore, it is strongly recommended that both the PowerPoint slides and the videos of the presentation of content included herein are viewed in conjunction in order that statements appearing in the PowerPoint slides are not interpreted out of context.

2. Climate Change Impact Pathways Sequences of change - • GHGs emission  Global warming  Changes in the climate Climate Events • rapid onset events or climate extremes • Cyclone, major flood, flash flood, GLOF • Slow onset events • Salinity, SLR, flood, storm surges, seasonal change, seasonal temperature fluctuations, etc.

3. How climate change affect us? • Climate Events • Causes • Mortality and Morbidity impacts • DAMAGE to assets and properties • LOSS of ecological services • Provisional services • Regulating services • Cultural services • Supporting services • These events eventually affect people.

4. How to understand the loss and damage? • Events  loss and damage because of • Exposure of people and their asset to the event • Intensity of the event • Vulnerability due to socio-economic status • As such climate evens trigger additional risks • Development Projects should be planned to be robust enough to withstand these risks • Need adaptation

5. How to study economics of adaptation? • Understand the impacts of climate events (arising due to climate change) on people • Define the specific climate events in question. • Find the extent (probable) of loss and damage the event might cause if it occurs • Design adaptation strategies • Adaptation means building resilience to withstand climate events • Both soft and hard strategies needs to be understood • Find the costs • This means that the cost of adaptation is now defined.

6. Climate Change and Public Expenditure • Khulna City is a case study on understanding climate change impact on the city people and design appropriate adaptation strategies • Issues at hand • Define the climate events related to water infrastructure of the city due to climate change • Design adaptation strategies to reduce or remove impacts • Separate cost of adaptation from other project costs? • Objective is to claim the ‘additional costs’ from climate funds/climate resilient fund/climate adaptation funds/climate trust fund?

7. Khulna City Water Sector • Khulna is a south-western metropolitan city with a population of about a million • It is a major city of the country • Salinity in water is rising • Water-logging is increasing • City is planning to upgrade its water infrastructure – Water supply and Drainage system • This study is designed to understand the CC impact on this plan.

8. Khulna City • 31 Wards • 1,000,000 Population (approx.) • Rivers • East – Rupsha and Bhairab • West – Mayur • Drainage through Mayur • Land elevation 2.5m from the mean sea level • Climate Induced Threats • Water logging • Salinity Intrusion • Cyclone/Storms

9. Socio-economic team

10. Study Method

11. Climate Scenarios

12. Data Collection

13. Optimistic, Pessimistic and Realistic Scenarios

14. How to assess ‘future’ damage and loss? • We needed appropriate counterfactual scenarios for future situations • Look at super cyclones or major flooding occurred in recent past • Look at highly saline regions • Look at past coping and adaptive behavior of people of Khulna

15. Climate model results

16. Sea level rise in Bangladesh

17. Integrate local environment from GCM resluts • Now results are used in Regional Hydraulic Model and in Urban Drainage Model.

18. Calibration and modeling • Local conditions • Rivers • Canals • Wetlands • Drainage system • Sea water level rise • Rainfall • Socio-economic variations • Future city expansion plan

19. Changes in land use-2030 and 2050

20. 2050 water-logging by Ward

21. Measuring climate change impacts

22. Economy in 2030 and 2050?

23. Changes in socio-economic variables

24. Adaptation options

25. Issues at hand for CBA

26. Damage estimates due to climate events per episode (average of 10 years value)

27. Damage function

28. Estimation of avoided damages (benefits)

29. 2050 water logging

30. Impact of Adaptation

31. Damage estimates …

32. Elements of BCA

33. Benefit cost ratio

34. Benefit cost ratio

35. Learning • CC adaptation study • Requires multi-disciplinary team • Needs to understand climate events, climate risks • Use future climate scenarios • Needs to develop socio-economic scenarios for the future • Identify additional costs in project • Justify which adaptation measures make sense. • Access international finance mechanism to pay for climate related adaptation costs.